As a technology, eSIM has been around for a decade now. However, global eSIM adoption was around 3% last year and will only cross 5% this year.
Despite these figures, analysts, eSIM-providing startups, and investors are bullish about eSIM’s upward trajectory, largely thanks to travel.
Device compatibility
One of the key factors for that is phone makers launching devices with eSIM features.
The first batch of smartphones with eSIM arrived in 2017 and 2018, with the Pixel 2 and the iPhone XR among the most notable phones. In 2022, Apple ditched the physical SIM slot to go eSIM-only for the U.S. market, and Google followed suit with the Pixel 10 this year.
This year, Apple upped the ante by releasing the eSIM-only iPhone Air and offering an eSIM-only model of the iPhone 17 series in more than 11 countries as an option. One key advantage of these eSIM-only phones is that they offer slightly larger battery life than the models with a physical SIM slot.
Analytics firm Counterpoint said that in 2024, the penetration of smartphones with eSIM was just 23%. The U.S. is the strongest market for eSIM, with 41% of devices launched in 2024 having eSIM capabilities.
Until recently, eSIM has been a feature of top-end devices, but that is changing slowly. GSMA said that just in the first half of 2025, brands have launched than 60 eSIM-enabled smartphones.
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China can be a major factor in eSIM’s adoption. This October, after the launch of Apple’s eSIM-only phone and a few hiccups, China’s telecom providers began offering eSIM support. Pablo Iacopino, an analyst at GSMA, said local manufacturers like Huawei, Xiaomi, Oppo, and Vivo will also likely launch more eSIM-native or supported devices.
These manufacturers have a big share in economically sensitive markets in Asia and Africa. They can gradually include eSIM support across price ranges to support the domestic demand.
“Chinese brands, when they see that the Chinese MNOs have launched eSIM services for the domestic Chinese market, they will probably start introducing eSIM across a wider range of smartphones, including, medium and low-end market,” Iacopino said. “But I don’t think they will go eSIM only immediately. They will start with supporting both physical and eSIM, before shifting to eSIM-only models.”
Currently, even within devices with eSIM support, few people are using the technology — but that’s changing. Steffen Sorrell, head of research at Kaleido Intelligence, a telecom analyst firm, said that it observed a 30% activation rate in devices with eSIM capabilities in 2024. The firm estimates that the rate will go up to 75% by 2030.
Travel is a big catalyst
eSIM is one of the most convenient ways to get connectivity while you are traveling. A GSMA survey said that 51% of people using eSIM use it for travel. Plus, it is a more secure solution, given that often eSIM hardware is bound with secure hardware elements, making it difficult to tamper with.
These elements have been positive for eSIM provider startups, AirAlo, Holafly, eSIM.me, Nomad, and Truely. Even the Lithuania-based security provider Nord launched an eSIM service called Saily. Most of these companies have seen growth in their customer base, and that’s largely thanks to travel.
GSMA said that travel is currently proving to be a strong catalyst for eSIM growth as frequent travelers prefer to buy devices with eSIM support. Plus, they could adopt eSIM for their long-term usage.
“People might experience eSIM for the first time while traveling. These users who like the eSIM experience would go back home and request their network providers to make a switch from a physical SIM,” GSMA’s Iacopino told TechCrunch over a call.
AirAlo is one of the biggest eSIM companies around and has been active for more than six years. The company’s CEO, Bahadir Ozdemir, said that the app is responsible for many users experiencing eSIM for the first time. The company did a survey on its app last year, with 85% responders being first-time eSIM users.
“Roughly 15% of travel connectivity is being powered by eSIMs, and the number is growing. Once users discover how they can get connectivity with eSIM, they don’t really want to go back to the old way [physical SIMs] of doing it,” Ozdemir noted.
He said that while a lot of telecom operators offer eSIMs, it is not easy for customers to discover those, and apps like Airalo make the process easier. Network providers are also thinking about the travel eSIM market. For instance, Vodafone partnered with UEFA to launch a specialized eSIM for travelers attending football matches across the continent.
Growth and investor interest
Travel-related eSIM startups have seen notable growth. Truely said it has served more than 70,000 travelers over the last two years, with 2x order growth this year. The startup, which raised $2 million extension round in June, said that apart from partnering with fintech services and travel apps, it is also exploring governmental collaborations in different regions.
NordVPN said that its Saily eSIM app saw a seven-digit userbase after its launch in March 2024. The company also launched a $60 per month Ultra plan with global coverage.
Holafly said that it has sold more than 15 million eSIMs since its inception in 2018 and has crossed $500 million in total revenue. The startup noted that out of that figure, it earned $200 million in 2024.
AirAlo’s blockbuster $220 million round, led by CVC and announced in July, made it a unicorn and was the most notable eSIM investment in the last two years. Meanwhile, French eSIM startup Kolet nabbed $10 million in Series A funding led by Daphni with participation from former Expedia Group CEO Peter Kern and Apple’s former vice president of marketing Jon Gieselman.
Scott Shiao, a principal at Goodwater Capital, said that the investment concentration will be on travel-related eSIM startups on the consumer side for the time being, but there could be an opportunity in domestic markets in the future as well.
Martell Hardenberg, a partner at Antler, said that while the travel eSIM use case has grown, a lot of users can be considered early adopters, and there is still much room to grow.
“I think there is opportunity in offering bundled services to global travelers or digital nomads about what can companies offer beyond travel SIM cards and make it a lucrative package for these user profiles,” Hardenberg told TechCrunch.
Investors will likely look for offering, marketability for long-term bet as there might be consolidation a few years down the line, Kaledio’s Sorrell said.
“The market is obviously on its way up, but I think sooner or later we’re going to reach a saturation point in terms of the providers on the market there. So investors will look into the long-term viability of the business along with things like customer loyalty, quality of coverage, and even association with marketing capabilities, how you’re able to promote that eSIM, whether it’s through airlines, banks, or cab companies,” he said.
Challenges in adoption
A couple of roadblocks in adoption are education, trust, and ease of use. A lot of people just don’t know what an eSIM is.
“Spotify can tell people to download Spotify because people know about music, and Netflix can tell people to download Netflix because people know about TV shows,” Airalo’s Ozdemir said. “But we couldn’t do that with Airalo, as a lot of people don’t know about eSIMs.”
He noted that the company regularly partners with different influencers to educate people about connectivity on the go through eSIM and redirects them to Airalo.
Truely CEO Eric Dadoun believes that given there is a steady rise in devices that are eSIM only, consumers would be forced to know about the technology as well. He said that companies working in the eSIM industry will still focus on user education for customer acquisition in markets where buying an eSIM-only device is optional.
One of the thornier parts of using an eSIM is that when you buy a plan from any of the apps, you get a QR code in your email that you need to scan to install the eSIM. This means that you need a second device that displays the QR code. The whole process is cumbersome if you are visiting another country and you want to buy an eSIM when you are at an airport.
GSMA’s Iacopino agreed that the process is cumbersome for many users, and as adoption grows, eSIM providers and hardware makers will need to figure out a way to make the process smooth.
Kaleido Intelligence’s Sorrell noted that for some network providers, the move to eSIM is slower, as they have legacy technology and systems that are proving to be a roadblock. They would also need to make the process of switching to this tech fully digital so customers don’t have to visit a store.
